Applying the Scientific Method to the Sales Process

Welcome to 2009! I’d like us all to start off the new year making a simple sales list. This list should have two headings “What I did good” and “What I did bad”

Try to think of some sales tactics that you did which proved to win you business. Maybe you sent a reminder email between phone calls and people were more likely to take your call, or perhaps you finally started recording sales call details in a CRM, or whatever. The point is to think about what you did to help build your sales funnel or at least make your job easier.

Secondly, and this list should be easier, make a list of things that didn’t work. Maybe you were offering discounts right off the bat and it didn’t help your close ratio, or you might have even tried to start at the bottom of an organization in your selling efforts, again, whatever. The obvious statement here is not to do these things again, but more importantly try to understand why they didn’t work. For instance, maybe you’re already very competitively priced and slashing prices won’t help close more deals – in fact it might make your offering look like a cheap alternative, and that’s never good.

So make your lists, check them twice and put them in your drawer. Pull them out once a month and review and add to it.

In the previous post, we talked about the basic sales strategy of playing hard to get. This post will look at an example pulled from a real-life sales call.

To set the stage, imagine that you have developed a manner by which to produce a material that no one else can currently manufacture. The competing material fails in service so often that designers are desperate to design it right out of service, but they are forced to use it because it’s all that’s out there.

OK, so you trot into your prospect’s office and lay out some parts that you made from your new material and their jaws instinctively drop to the ground in amazement, they rush out of the room to huddle and come back in much more composed.

You run the rest of the meeting and collect some cost data on their current practices and gather some forecasts for what a successful material could do in their market place. You leave them with the impression that you’ll get a formal quote to them in about a week but that they should be prepared for an expensive number because your processing route is very costly.

After about a week you overnight them a shiny proposal for your material at $500 per pound – knowing that the competition costs them about $125 per pound. You get an immediate call:

Customer: “This price is unacceptable and you need to resubmit.”

You: “I understand your frustration, but as we detailed in our last meeting, our manufacturing route precludes us from competing with the price of your current solution. Perhaps this isn’t a good fit for our material after all.”

Customer: “Please take another look at your numbers and get back to me next week with your best and final offer.”

A week passes…

Customer: “Have you had a chance to rework your numbers?”

You: “I reviewed our quotation with the production team and we really can’t do much. I could probably shave off about $3 per pound if it would help close the deal, but that’s it.”

Customer: “That’s not even close to enough, this deal is dead!”

You: “Very well then, please keep us in mind if you come across any applications that can bear this increased cost.”

A week passes.

A month passes.

Customer: “Uh, yeah, hi, it looks like we might have found a few applications where your high costs can be acceptable.”

You: “Great, let’s talk!”

A note of caution: this is a very delicate sales strategy that can easily backfire if you’re not completely in tune with your customer’s needs and your competitor’s offerings. It isn’t for the faint of heart.

Playing hard to get is an accepted, and effective, way to lure a potential mate into a relationship – so why not apply it to your selling strategy.

I first picked up the subject several years ago from an article in the Harvard Business Review, I think they called it “retro marketing”. It essentially means that you lay out what you have and then revert to a take-it or leave-it attitude with your prospect.

I’ve come to rely on this sales approach rather heavily over the years and will lay out a hard example in the next post, but the main ideas follow:

being hard to get doesn’t imply that you can be arrogant

you need to have the best quality and customer service to pull this sales strategy off

you need to be prepared to walk away from any deal you try this on

you need to believe that your proposed solution is the best solution for your client

you (might) need your boss’s agreement to deploy this strategy

you need to understand your competitors offerings before trying this

The main point is to be careful, because once you put this idea out there, it’s tough to claw back to another starting point and alternative strategy. The idea is to extract what your solution is worth and to keep your prospect’s best interest at heart – that can be a fine line to walk.

The next post will have a real world example of this strategy in action.

In the base post of this series as well as a related post, we talked about many different aspects of a sales quotation and even put forth a sample quotation. In this post, we’re going to talk about what leadtimes you should put on your quote.

A quoted leadtime can mean different things to different parties. Oftentimes, on a quote a salesman will put a leadtime that refers to when the product will ship. The customer, however, will often view leadtime as when they can expect your widget delivered on their dock. So be careful to make this distinction clear.

Another typical item to carefully spell out is that your quoted leadtime is after you receive their order (ARO). So if you quote “3 weeks ARO”, it means that the leadtime is three weeks after they send in their order.

If your product is highly dependant on receiving raw materials, you might want to quote the that the leadtime also is after receipt of materials (ARM).

Finally, if your dealing with an unknown customers and you need paid up front, your leadtime needs to reflect that you won’t ship until after receipt of payment (ARP).

So a complex example would be:Shipment: 4 weeks ARP, ARM (note that raw materials won’t be ordered until payment is received)

In the above example, you are saying that after you get paid, you will order raw material and ship your product out in 4 weeks from that day.

Please CLICK HERE to download a sample sales quotation to use as a template in your sales efforts.

This time of year represents a time to reflect on what we’re thankful for. In the spirit of our U.S. Thanksgiving holiday, here are five things that I’m thankful for – from a sales point of view anyway.

I’m thankful

that my competition is lazy and follows the “show up and throw up” strategy.

that my customers view me as an expert in my field and come to me for advice – even on things I don’t sell.

for all the technological advances that allow me to have an easy to search database of my customers and prospects.

I try really, really hard not to mix personal sales efforts in with the posts (right now it’s below 1%) but I’m so excited about this new venture I’m involved in that I just can’t contain myself. The success of this EngineersCanSell site has really opened some exciting new doors for me – thank you all for that.

I’ve joined forces with a few dynamite design and marketing partners to form aCreativeSource.com. We are now in a position to offer services across all sales and marketing functions. Our specialty is blending marketing and sales strategies in a cost effective manner.

As a new entity, we’ve already completed jobs ranging from designing logos, marketing brochures, and Web sites to developing full blown marketing and sales plans to executing a survey and cold call strategy to develop high quality prospect lists.

Oh, the point of this post. Please check out our new site at http://aCreativeSource.com and if you have a need for our service and are one of the first ten people to mention “EngineersCanSell”, we’re offering 20% off in exchange for a testimonial.

I’ll warn you that I may have another exciting announcement in the months ahead!

Update: This offer has filled up and is now closed – thanks for the interest.

In the previous post, we talked about exactly what viral marketing means. That begs the question “Should I use viral marketing?”

This is an area that I am quite passionate about and think that we, as engineers, can gain a competitive advantage. You need to tread lightly, however.

Depending on what you’re selling, a lot of your customers will look at you like you have two heads if you tell them that they should be following your every move on Twitter. You run the real risk of alienating these folks – I talk from experience here. I used to try to keep my marketing and sales methods on the cutting edge of social technology. I’ve learned over the past few years that my customer base runs literally about two-years behind that curve, and there’s nothing wrong with that.

My point is that you need to know where your customers stand in this arena before you pummel them with zany invites and pitches. You don’t want to try to sell an Xbox game to someone that is still using Atari.

Start small with simple things like newsletters and blogs and see how your base reacts. Educate them as you bring them along the technology curve and you’ll be seen as an expert in two fields, and that can never be a bad thing.

Happy Election Day everyone! I fought my instincts and followed my peers’ advice and stayed away from talking politics and comparing the two campaign’s selling style. I now regret that decision and wish I had put up some posts about how each campaign approaches selling their candidate. I was worried about offending 1/2 of my audience. In retrospect, I think I underestimated your understanding that I would be talking about selling and not politics (you can get that type of input from several other thousand blogs if you want it). At any rate, we must march on – see me in four years.

I’ve gotten a few emails over the past several months asking exactly what viral marketing is.

I typically explain what it is and how it can help your sales efforts. I’m finding an interesting pattern where the sales engineers get the concept and want to develop a campaign but upper management isn’t on-board.

We’ve all heard the term ‘viral’ before but it isn’t the easiest thing in the world to explain – until now. The folks at VM People created this awesome video that we can all understand.

It walks you through the process of using viral marketing and selling to sell more soap. The main point is to give your product advocates the tools and motivation to help you sell. Pretty cool stuff.

With so many different possibilities for lead generation, it was difficult to select a single illustrative example, but it had to be done.

Sally the saleswoman is responsible for growing sales for her company’s accounting software package.She knows the product inside and out and even passed her CPA exam recently to help illustrate her deep accounting knowledge and give her instant credibility.The company gave her six months to bulk up sales by 15%, a tall order for any product.Here is how Sally exceeded her sales goal and her commission expectations.

She called on her classmates from her CPA preparation class to ask for advice on finding referrals.Note that she didn’t ask for referrals, but asked for help on getting referrals – that’s a fine line, but an important one to take heed to.By asking for this type of help, Sally let her classmates relax their guard and offer advice.Her classmates are mostly practicing CPA’s, so there is no competition for software sales to worry about.

Next Sally poured through as many press releases as she could that dealt with companies that she already sells into and companies she wants to sell into.The releases that had anything to do with a need for an accounting package were treated as lead material.If there was good financial news, Sally called to congratulate them and see if their current software was up to the task.If there was bad financial news, Sally called to explain how her software helped another company save money and brought it back into the black.Expansions – does their current package have easy extensibility?OK enough, you get the picture.

She attended a trade show to gain insights into how her product stacks up against the competition.This allowed her to easily handle any objections where the competition was brought up as an alternative.Although, as discussed in another article, she was careful not to downplay or insult the competition to her clients.That strategy will get you no where fast.

At the same trade show, she presented a paper on using enterprise accounting software to streamline costs and minimize project cost overruns.

Sally bought ad placement from Google’s Adwords to help rapidly spread the word about her product.

Finally, she cruised LinkedIn for leads into companies that she wasn’t able to reach with the above methods.

The result of her efforts led to a 21% increase in business and the hiring of an assistant to help her manage all the extra business.

Depending on what type of company you’re working for, shop tours are typically a common step in the sales cycle. Prospective customers want to see what your machinery looks like, how clean it is, how much room you have, and just get a good feeling that you can actually fulfill their order.

A critical, but often overlooked, area of the tour is how your workforce projects themselves – in particular the technicians on the shop floor.

You should be continually coaching them on how important it is for them to smile at guests and say hi and to ask them if they have any questions. I’ve found that the best way to get them on the same page is to ask them beforehand if they would mind talking about their area to the prospects. You can then say something like “Joe, would you mind telling us a bit how this press works.”

In return the workers get a sense of pride and your prospects really see that you connect with the workforce and have the ability to track their orders through your manufacturing system.

Yes, I realize you may know more about the machine and could talk more eloquently – keep your trap shut.

Spread the fame around and always thank them with donuts (or oat bran muffins) the next morning.